Personal Finance Final: Major Purchases (Ch. 8, 9)
The gross capitalized cost includes the price of the vehicle plus what the lessee paid to finance the purchase plus any other items agreed by the lessee, including insurance or a maintenance agreement, over the life of the lease.
TRUE
Three factors affect the monthly payment on a mortgage loan: the amount borrowed, the interest rate charged, and the time period of the loan.
TRUE
When the purchase contract is signed, the seller keeps the earnest money as a deposit against the purchase price.
TRUE
Low-balling generally occurs just before the close of a sale.
TRUE * This is where you are waiting to get final papers and they say "I have to get my manager to approve it."
Comparison shopping can be done by window shopping at vehicle dealers.
TRUE * can shop at online, other dealers.
A consumer should tell the car salesperson how much he or she can afford for a car so the salesperson can help him or her find an affordable car.
FALSE
A private short sale occurs when a home sale is negotiated with the lender at a price below the actual balance of the debt.
FALSE
Sellers are the only source of financing for big ticket items.
FALSE
A car's sticker price is the manufacturer's suggested retail price.
TRUE
A lawsuit filed against a landlord for nonperformance may be heard in small claims court.
TRUE
Buying a home represents the largest expenditure most people ever make.
TRUE
By law, interest points must be included when calculating the APR for the loan.
TRUE
Home warranty insurance is quite similar to a service contract on a vehicle or other product.
TRUE
If a prospective home buyer simply changes his or her mind after putting up earnest money, he or she usually forfeits the money.
TRUE
Many communities have a multiple-listing service (MLS), which is an information and referral network among real estate brokers allowing properties listed with a particular broker to be shown by all other brokers.
TRUE
Mortgage insurance is generally required for almost all mortgage loans where the initial loan-to-value ratio is more than 80 percent.
TRUE
New vehicles can depreciate very quickly after purchase.
TRUE
One formally applies for a mortgage loan only after signing a purchase contract.
TRUE
Over 70 percent of homes have a mortgage.
TRUE
Sellers expect consumers to negotiate the price for autos and some other major purchases we make.
TRUE
Selling your home yourself is commonly referred to as a FSBO (pronounced "fizzbo") sale.
TRUE
The first attempt by a lender to dispose of a completely foreclosed property is at a foreclosure auction.
TRUE
The money factor (or lease rate or lease factor) measures the rent portion of your lease payment.
TRUE
Definitions
LKJLKJ;
More than ____ percent of service contracts are never used. 1. 60 2. 70 3. 80 4. 90
3. 80
The true cost of a new automobile to the dealer is: 1. (none of these) 2. the manufacturer's suggested retail price. 3. the invoice price. 4. the dealer holdback.
1. (none of these)
What does it mean in auto leasing and auto financing when you are said to be "upside down"? 1. You owe more on the car than it is worth. 2. You wrecked the car and can't pay the debt. 3. None of these. 4. You don't qualify for the lease or financing.
1. You owe more on the car than it is worth.
Which is not a step in the planned buying process? 1. Comparison shopping 2.Purchasing on credit 3. Preshopping research 4. Prioritizing wants
2.Purchasing on credit
When the final balloon payment is due on a balloon auto loan, you can generally: 1. sell the car and pay the balloon payment with the proceeds. 2. return the car to the lender. 3. (all of these) 4. pay the balloon payment and keep the car.
3. (all of these)
The product that is the best buy will be the one with the 1. lowest quality without regard for price. 2. highest quality at a reasonable price. 3. acceptable quality at a fair price. 4. lowest price without regard for quality.
3. Acceptable quality at a fair price
____ fee is (are) common miscellaneous costs in buying a home: 1. An appraisal 2. A loan origination 3. All of these. 4. A survey
3. All of these.
Consumer Reports annual buying guide is published in: 1. January. 2. April. 3. December. 4. September.
3. December.
Jason is buying a home with a $150,000 mortgage using a 6 percent, 15-year loan. How much of the first month's payment will go towards interest? 1. $9,000 2. $515 3. $900 4. $750
4. $750 SHOW CALCULATION
An increase in the value of a home is called: 1. depreciation. 2. amortization. 3. equity. 4. appreciation.
4. appreciation.
Most people should not make buying decisions for expensive purchases: 1. at home. 2. inside a retail store. 3. in a showroom. 4. inside a retail store or in a showroom.
4. inside a retail store or in a showroom.
Prices on "big ticket" items such as vehicles, furniture, appliances, and electronic equipment are usually the same from seller to seller.
FALSE
Sellers should not be used as information sources in pre-shopping research since they have a vested interest in selling you their products and services.
FALSE
The interest rate on a second mortgage is generally lower than the interest rate on the original mortgage.
FALSE
The subprime market serves higher-risk applicants with low credit scores.
FALSE
The term condominium describes a type of building rather than a form of ownership. Correct!
FALSE
The sticker price on a new car is typically the final sales price.
FALSE * This is MSRP * Final sales price is usually dealer invoice price
